Why Turkey’s Buying Chinese Missile Systems

In a move that surprised many, a Chinese defense company has won a US$4billion contract to help Turkey develop a long-range air and missile defense system, winning out over competing bids from U.S., EU, and Russian defense companies.

Following a meeting by the Turkish Undersecretariat for Defense Industries’ (SSM) executive committee on Thursday, Turkey announced it had selected a proposal by China Precision Machinery Export-Import Corp. (CPMEIC) to jointly develop its HQ-9 system (FT-2000). CPMEIC won out over bids from U.S.-based Raytheon and Lockheed Martin’s Patriot missile defense system; Russia’s Rosoboronexport’s S-300; and Italian-French consortium Eurosam’s SAMP/T Aster 30.

Although there have been rumors that Turkey was leaning toward CPMEIC, the news came as a shock to many. Turkey is a founding member of NATO, which is deploying the Patriot missile defense system in various countries throughout Europe. The Patriot and HQ-9 systems are not interoperable. Earlier this year, the U.S., Germany and the Netherlands also sent a total of six Patriot batteries to Turkey to shield it from the conflict in Syria.

Ankara’s decision seemed like a particular snub to the U.S., which has long maintained sanctions against CPMEIC over its alleged arms sales and defense cooperation with countries like Pakistan, Syria, North Korea and Iran. All U.S. persons and entities are prohibited from doing business with CPMEIC.

U.S. sanctions against CPMEIC go at least as far back as 1993, when it was sanctioned for transferring missile technology to Pakistan. The most recent round of U.S. sanctions against CPMEIC were in February of this year, when it was sanctioned alongside other Chinese persons and entities for selling Iran items banned under U.S. law.

According to Nuclear Threat Initiative (NTI), CPMEIC was established in 1980 by China’s former Ministry of Space Industry (MSI) for the explicit purpose of selling missiles manufactured under MSI’s direction. It doesn’t maintain missile production plants itself, but rather markets and facilities the sale of missiles made by Chinese defense firms.

Following Turkey’s announcement on Thursday, the U.S. expressed its displeasure at the decision.

“We have conveyed our serious concerns about the Turkish government's contract discussions with a U.S.-sanctioned company for a missile defense system that will not be inter-operable with NATO systems or collective defense capabilities,” Reuters quoted a State Department spokesperson as saying.

The decision is likely to deepen concerns that Turkey under Prime Minister Recep Tayyip Erdogan is distancing itself from the West in order to pursue a more independent foreign policy. Some U.S. analysts and former policymakers, including Vali Nasr, who served in the State Department during Obama’s first term, have expressed concerns about Turkey’s expanding ties with China in particular.

In his book The Dispensable Nation, Nasr pointed out, among other things, that Xi Jinping visited Turkey in February 2012 and that Prime Minister Erdogan returned the favor two months later. The latter trip, which included a stop in Urumqi, the capital of Xinjiang Province, seemed to signal that Ankara and Beijing were moving past their traditional frosty relations over China’s treatment of its own Turkish-speaking Muslim population, the Uyghur ethnic group.

In January, Erdogan again renewed concerns that Turkey is “abandoning” the West when he said: “If we get into the SCO [Shanghai Cooperation Organization], we will say good-bye to the European Union. The Shanghai Five is better — much more powerful.”

But Aaron Stein, the nonproliferation program manager at the Istanbul-based Center for Economics and Foreign Policy Studies, tells The Diplomat that the decision to award the missile contract to SMPEIC had more to do with Ankara’s desire to bolster its indigenous defense industry than any geopolitical reorientation.

As Stein explained by email:

“The deal was all about reaching an agreement with one of the four suppliers for a coproduction arrangement. Ankara has pursued similar coproduction arrangements with other suppliers for Turkey's anti-aircraft missile systems. In January 2013, the SSM – reportedly at the behest of Erdogan – cancelled the "off-the-shelf" tender, in favor of a coproduction arrangement.”

Stein, who is also an Associate Fellow at the Royal United Services Institute (RUSI), noted that the U.S.-based companies were unlikely to meet Turkey’s demands on technology transfers. “American firms have traditionally scoffed at Turkey's very demanding technology transfer demands,” Stein wrote, adding “It is hard to imagine Raytheon and Lockheed transferring critical design information for one of their most advanced missile systems to Turkey.”

Although Stein said that Prime Minister Erdogan holds significant sway over SSM’s decision-making, he also noted that Turkey’s demands on technology transfers long predate the current Turkish administration.

“Turkey's emphasis on technology transfer is not new,” Stein told The Diplomat. “In 1985, Turkey passed Law No. 3238, which sought to build up the domestic arms industry through a policy of offsets for military procurements.

“Turkey's current procurement policy prefers the local development of defense items. If the task is too great for Turkish defense firms, Ankara prefers co-development agreements, or, if that proves to be impossible, SSM prefers co-production/co-licensing agreements. The missile defense tender fits the third criteria.”